The government today approved a Rs 622 crore project for import of crude oil at Kandla port that will enhance its capacity by 12 million tonnes per annum to 104 million tonnes per annum.

"The Cabinet Committee on Infrastructure (CCI) today approved the project for development of Single Point Mooring (SPM) and allied facilities for the import of crude oil off Veera (outside Kandla creek) in Gulf of Kutch at Kandla Port," an official statement said.

The project will be built on a build, operate and transfer basis (BOT) with a concession period of 30 years at an estimated cost of Rs 621.53 crore, it said. Kandla port is strategically placed to function as a gateway to Western and Northern India, particularly for import of crude oil. There are several refineries in the North-Western India that require support facilities like SPM, the government said, adding that expansion of existing refineries in these regions are expected to create additional demand for SPM facilities for ports on the West Coast.

Kandla port proposes to capture this incremental demand, and this project has been conceived accordingly, it said. "The SPM project will enable the Kandla Port Trust to enhance its capacity by 12 million tonnes per annum, taking the total cargo handling capacity of the port to 104 million tonnes per annum and this will also augment the energy security of the country," the statement said.